The Health Care Ruling & What It Means for You... an update

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Now that the Supreme Court has ruled, many questions arise over the Affordable Care Act and what the average American or small business owner can expect as the law continues to take effect. Hopefully this post will help to answer some of the questions.

Individual Mandate: Beginning in 2014, all Americans will be expected to have some form of insurance. The law attempts to create fail safes and exemptions for lower income individuals, members of Indian tribes, and those with specific religious beliefs. However, if an individual fails to meet certain criteria and chooses not to purchase insurance, s/he will be assessed a penalty. In 2014, the penalty, unless you qualify for an exemption, is 1% of family income or $95 per adult ($47.50 for a child), whichever is greater. The penalty increases in 2015 & 2016.

Health Care Reform and the States: The majority of the burden for implementing the reform falls on the states. This is how the states, and ultimately, their citizens will be impacted.

By November 2012, states are expected to have significant progress toward establishing health insurance exchanges. Some states have started this process where as others have not, and some chosen to opt out completely. The insurance exchange plans are state run, federally subsidized programs that seek to provide affordable options to state constituents.

To provide greater access to health care for lower income individuals and families the poverty threshold eligibility for Medicaid also increases under the Affordable Care Act. Again, the states are charged with implementing an expansion of Medicaid. To increase access to Medicaid and help cover the cost states will receive federal subsidies. Currently, states carry about 43% of the cost of Medicaid. "Under the new law, the federal government will pay the full cost of covering those newly eligible for Medicaid for three years, from 2014 to 2016. The federal share will then gradually decline; it will be 90 percent, starting in 2020." (NYTimes.com)

Who's paying for of this?: In short... Wealthy Americans will carry the majority of the cost. "Part of those costs will be paid through higher tax rates, slated to start in 2013, for some high-income people, including a 3.8% tax on some investment income, as well as a 0.9% increase in payroll taxes for single filers with income of more than about $200,000 and married couples earning more than $250,000." (WSJ Market Watch)

Want to learn more about the hows, whys and whens of the Affordable Care Act? Resources, commentaries, and explanations are countless. Here are a few links I thought might be help (& hopefully unbiased).